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> The trick is figuring out what is a core competency and what should not be. Spirit in particular just feel like financial engineering bullshit. From a quick
by x0x0 3y ago
> The trick is figuring out what is a core competency and what should not be.
Spirit in particular just feel like financial engineering bullshit. From a quick google, in 2020, the 730 max accounted for more than 50% of Spirit's annual revenue. I struggle to understand how it's good for Boeing or Boeing's customers for T Rowe Price and Vanguard to own a supplier like that.
- bluGill 3y agoWhat is the difference between a division and an independent company? Eventually you reach a point where head of a division and CEO have about the same responsibilities so why not spin them off - by doing this the CEO doesn't have to exercise as much oversight on the operations of that division/supplier. The supplier can diversify a bit too which means if you have a downturn the suppler may have enough other business to survive while if they were in house they wouldn't look for that and thus make your financials worse when they are already nearing bankruptcy. It is very common for companies to exists where they have one major customer that is all or almost all of their business. What is right is a very complex question that can never be answered with 100% confidence. However your simplistic analysis isn't helpful in figuring this out.